Is Facebook a Monopoly?

By Sarah Morgan

Is it already too late for Facebook competitors? Google+, the Internet behemoth’s second foray into social networking, is even less popular than MySpace, according to new data. Analysts say that’s partly because Google made some key mistakes in building their social networking site, but it’s also a sign of how difficult it is to compete with Facebook these days.

Internet users spend an average of about three minutes a month on Google+, according to comScore data — less than half of the eight minutes they spend on MySpace, and barely a blip next to the 405 minutes they spend on Facebook. Since Facebook users built up their networks and social histories over a period of years, “you have to offer them something meaningfully different and useful to get their attention,” says Nate Elliott, the principal analyst for interactive marketing at Forrester Research. “And Google+ hasn’t done that. There aren’t any meaningful new features. Google+ is Facebook in black,” Elliott says.

In fact, experts say one of the key features of Google+ actually limits its ability to build the kind of powerful network that Facebook now enjoys. Facebook estimates it takes about 100 friends to create the kind of “network effect” that makes its service valuable. But Google has made “circles,” a feature that limits that network effect, a defining part of Google+. “They’ve encouraged people to make sure that none of their posts actually go out to their entire network,” Elliott says.

To be sure, Google says its network isn’t intended just as competition for Facebook, says Andrew Lipsman, an industry analyst with comScore. For example, they’re also using the social network as a way to serve up more relevant search results. “More engagement is better than less, but it’s very legitimate to ask if that’s the most important thing to determine if Google+ is a success,” Lipsman says. A spokeswoman for Google says that Google+ “is much more than a destination site,” and that the company thinks of the service as “a deepening of its relationship to billions of existing users” of its other services.

But Facebook has become dominant enough that it’ll be very difficult for any company to create a successful competitor, Lipsman says. “We’ve seen that when you have two general social networks, they can coexist for a while, but eventually one of them tends to win out,” he says. Here in the U.S., Facebook and MySpace were both popular for a couple of years, but Facebook eventually won that battle, and similar patterns tend to play out internationally, he says.

Still, sites that fill a sufficiently different niche can succeed, experts say. In fact, Facebook’s success actually makes it easier for targeted social networks to grow, says Lipsman. Take Pinterest: This relatively new network has grown very rapidly, and users spend about 100 minutes a month on the site. Its focus on sharing aspirational, visual content makes it different enough that it offers users a compelling reason to join, but it’s also taking advantage of the fact that Facebook changed the way people behave on the internet, he says. “If something like Pinterest had come up 5 years ago there’s a good chance it wouldn’t have caught fire like it has now,” he says. “A lot of people learned how to share on Facebook.”

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